Chinese investors rediscover taste for Swiss companies

A third of the Chinese deals in 2021 were in the healthcare sector: pharma, biotech or medical technology Keystone / Alexandra Wey

After a pandemic-related slump in 2020, Chinese companies last year spent more money on acquisitions or investments in Swiss companies. They invested a total of $96 million (CHF89 million) on nine deals.

In 2020 they spent only $7 million on eight acquisitions or investments in Switzerland, according to a study published on Friday by consultants EY.

Three of the nine transactions in 2021 were in the healthcare sector (pharma, biotech or medical technology), while there were two in consumer products and services.

“In Switzerland in particular the healthcare sector is increasingly becoming one of the most important targets for Chinese companies because there’s a lot of catching up to be done in this area in China, especially in research and development,” said Hubert Stadler, head of EY’s China desk in Switzerland.

This trend can be observed throughout Europe. The number of Chinese acquisitions and investments in the health sector increased from 16 in 2020 to 26 last year.

Overall, Switzerland’s nine deals put it in sixth place; the previous year it shared fifth place with Italy and Spain. At the top, Britain (36 deals) overtook Germany (35).

‘Dampening effect’

However, the Chinese appetite for buying in Europe has massively diminished in recent years. The 155 acquisitions and investments in 2021 are half the number seen at the peak of the spending spree in 2016. The purchase total of $12.4 billion is a fraction of the record $85.8 billion back then.

“The now high hurdles for foreign investments, especially in certain critical industries, as well as the increasing competition from financial investors with strong capital are having a dampening effect,” said Michael Messerli, head of Strategy and Transactions at EY.

He added that the recent sharp rise in purchase prices for company acquisitions and investments also had consequences for investors from China.

“In some cases the Chinese interested parties no longer wanted to go ahead with it. Listed Chinese companies in particular fear putting their own share price under pressure with expensive acquisitions,” he said.